A situation whereby the strike price of an option is equal to (or almost equal to) the market price of the underlying security/ asset (see at-the-money option). For example, a call option with a strike price of $75 and an underlying price of $75 is at the money, i.e., the holder will get no gains (payoff) on exercise (see at-the-money call option).
Generally a derivative is said to be at the money when its actual or expected inflows equal its outflows (for example, at-the-money swaps or ATM swaps).
